U.S. business borrowing for equipment falls 24% in August- ELFA

Sept 23 (Reuters) - U.S. companies’ borrowings for capital investments fell about 24% in August from a year earlier, the Equipment Leasing and Finance Association (ELFA) said on Wednesday.

The companies signed up for $7 billion in new loans, leases and lines of credit last month, down from $9.2 billion a year earlier. Borrowings in August fell 23% from the previous month.

“The hope is that Congress’s inability to enact additional stimulus legislation to combat the pandemic will not slow an economic recovery that many economists, including the Fed, are projecting for the third and fourth quarters,” ELFA Chief Executive Officer Ralph Petta said.

Washington-based ELFA, which reports economic activity for the nearly $1-trillion equipment finance sector, said credit approvals totaled 71% in August, down from 72.9% in July.

ELFA’s leasing and finance index measures the volume of commercial equipment financed in the United States.

The index is based on a survey of 25 members, including Bank of America Corp, CIT Group Inc and the financing affiliates or units of Caterpillar Inc, Dell Technologies Inc, Siemens AG, Canon Inc and Volvo AB.

The Equipment Leasing and Finance Foundation, ELFA’s non-profit affiliate, reported monthly confidence index of 56.5 in September, an increase from the August reading of 48.4.

A reading of above 50 indicates a positive business outlook. (Reporting by Shreyasee Raj in Bengaluru; Editing by Shailesh Kuber)